The ex-chairman of the Federal Board of Revenue (FBR), Shabbar Zaidi, has suggested that with the effective handling of issues related to Afghan transit trade, the US dollar could potentially decrease to as low as 250. Zaidi emphasized that Afghan transit trade significantly influences Pakistan's imports, accounting for nearly $6 billion.
He asserted that reducing this impact could lead to a stronger Pakistani rupee against the US dollar. He explained that Afghanistan lacks sufficient foreign exchange reserves and relies on dollars from Pakistan, often through the 'hawala' system, to finance its imports.
Additionally, Zaidi highlighted the interconnectedness of recent efforts to combat currency smuggling and regulate Afghan transit trade. He commended recent government actions, including the notification of a new list of items prohibited for import by Afghanistan via Pakistani sea and border ports under the Pakistan-Afghanistan Transit Trade Agreement.
Furthermore, the FBR has imposed a 10 percent processing fee on significant categories of Afghan transit commercial goods, such as confectioneries, chocolates, footwear, machinery, blankets, home textiles, and garments, imported into Afghanistan while in transit through Pakistan.
Moreover, the FBR will require bank guarantees for all Afghan transit goods equivalent to the total duties and taxes applicable to goods destined for Afghanistan through Pakistan. Zaidi emphasized that effective management of Afghan transit trade could potentially resolve 20 percent of Pakistan's economic problems.